Bio-Techne (TECH) investor relations material

End market trends and outlook

• Pharma remains the largest segment with sustained double-digit growth, supported by easing regulatory concerns and increased M&A activity, expected to continue barring unforeseen disruptions.

• Biotech, about 20% of revenue, saw mid-single-digit declines but is rebounding as funding accelerates, with strong growth in funding across IPOs and venture capital, expected to translate into spending over the next 2-3 quarters.

• Academic markets are stabilizing; Europe shows low- to mid-single-digit growth, while the US is recovering from funding threats, with recent Congressional approval of a 1% NIH increase and removal of indirect cost caps, likely leading to growth in the back half of the year.

• Asia, especially China, is showing steady recovery with three consecutive quarters of growth, driven by returning government funding and strong performance in cell therapy and instrumentation.

Financial guidance and business drivers

• Fiscal 2026 guidance anticipates exiting Q4 with mid-single-digit growth, with actual performance hinging on the timing of funding translating into spending, especially in biotech and academic segments.

• Two large GMP customers, previously a headwind, are expected to have a reduced negative impact in Q4, with future growth depending on broader customer base progression.

• Excluding the two major GMP customers, the cell therapy franchise grew 30% in the current quarter and high-teens on a TTM basis, with over 80 customers in clinical trials and a net increase in customer quality.

• The GMP proteins business is expected to maintain a 20% growth floor in normal markets, with future lumpiness less severe due to customer diversification.

Capital deployment and strategic focus

• M&A remains a top capital priority, but the focus has shifted from quantity to quality and strategic fit, with cell therapy, organoids, antibodies, and AI/data-driven adjacencies as key areas of interest.

• The company has matured its acquisition strategy, prioritizing fewer but more impactful deals, supported by an upgraded corporate development team.